Regardless of individual political views, the fact that we have a majority government should mean that we can expect some certainty and stability in the economy. The Government can continue with their economic plan and Britain will not have to endure the handover and settling in process that comes with a new Government coming into power.
We would expect that this would translate into increased business confidence and, in turn, into business investment. This should ensure that economic growth will continue to move in the right direction, creating opportunities for many businesses and business owners.
In the short term, the hot topics will be tax and continuing austerity measures which the Government can pursue without the former constraints imposed by coalition and minority rule.
It is widely expected that there will be a second Budget. We do not envisage this containing anything substantially damaging to businesses, but as always there may be devils in the detail as the Chancellor introduces more measures to counter tax avoidance.
Certainty as to the future of the capital allowances Annual Investment Allowance would be welcomed sooner rather than later. As it stands, the current £500,000 allowance, which gives up front tax relief for capital expenditure, is set to reduce to £25,000 on 1 January 2016. In his last Budget speech the Chancellor indicated that he would not allow it to reduce to that level, but would not commit to what the new amount would be. Prolonging this uncertainty is likely to be damaging to business capital investment plans, so the sooner it is fixed, the better.
It will also be interesting to see how the Conservative proposals for a new inheritance tax allowance for houses passed down the family evolve. The initial proposals were complex, but potentially of great benefit to many families.
In the longer term, the prospect of a referendum in 2017 to determine the UK’s ongoing membership of the EU is likely to cause major uncertainty for British businesses.
For more information on tax measures or if you would like any advice, please get in touch with the tax team on 01254 679131 or email firstname.lastname@example.org.